Investing into Dividend Stocks

Investing into dividends is simply buying dividend stocks then keep them and benefit from the passive cash flow that they give off. This has a few big advantages.

1. Low Maintenance

The biggest advantage of this strategy is that it is very low maintenance. You can easily buy strong dividend paying stocks and then hold onto them for the long term without having to manage your account.

2. Passive Income

It is also a very easy way to make passive cash flow. Simply by owning shares of dividend stocks you can make money consistently month after month. If you own enough shares of dividend stocks you might even be able to leave your day job.

3. Two Possibilities to Grow

Investing into fundamentally strong stocks that also pay dividends give you the ability to profit in 2 different ways. The two ways are dividends and the appreciation of the underlying stock. Also because the dividend prices increase as the stock price does there is a real long term opportunity to get passive income here.

But dividend investing does have some disadvantages. The biggest disadvantage is that it takes some good money to make a huge cash flow this way.

Dividend investing is not really a growth strategy; instead it is a strategy to make an income off of your money once you have money. And often times you do need a considerable amount if you want to make a living from the stock market this way.

For instance say a stock has a dividend yield of 5% and you want to make $100,000 a year you need to invest at least $2,000,000 into it in order to reach your goal. The bigger your goal is the more money you need to invest.

It may not be the most glamorous way to make money, but it is a nice consistent way to grow your money over time while at the same time get some extra cash flow every month, so it is worth looking into, especially if you are worried about retirement.


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